Dynamically regulated cell adhesion mediated by cadherins plays an important role during neural development. We use the formation of the larval central brain in Drosophila as a model system to investigate the function of the classical cadherins, DE-cad and DN-cad. The larval brain starts out as a cortex of several hundred primary (embryonically formed) neurons surrounding an inner neuropile, formed by axons and dendrites of these cells. Glial cells form sheaths around the neuropile, around discrete clusters of neurons, and around the brain as a whole. As development proceeds, neuroblasts located at the cortex surface produce lineages of secondary neurons that aggregate in layers around the primary neurons. Axons of secondary neurons extend short tracts (PATs) that in most cases arrest at the glial sheath that forms the cortex-neuropile boundary and differentiate only later during metamorphosis. Secondary neurons and axons, as well as all glial cells express DE-cad. Primary neurons globally express DN-cad. Evidence gathered during the previous funding period indicates that DE-cad and DN-cad play a pivotal role in neuroblast proliferation, positioning of neurons in concentric layers that reflect the time of cell birth, secondary axon navigation, axon arrest at the cortex-neuropile interface, and separation of primary from secondary axons. We propose in the following six specific aims which focus on the role of cadherins in Drosophila larval brain development. The first aim is to investigate in detail the pattern and time course of PATs formed by different lineages, and the properties of the stationary growth cones in contact with the neuropile glia. Aim #2 looks at the development of glia and the effect of ablating glia on larval brain development. Aims #3 and #4 go into molecular detail in addressing the interactions between DE-cad and the dynamic cytoskeleton that underlies DE-cad function in neural development, focusing in particular on the interaction between the "stalled" axons of secondary neurons and glia. In Aim #5 we address the significance of having two classical cadherins, DE-cad and DN-cad, expressed in a complementary pattern during brain development. Aim #6 is intended as a pilot study, analyzing the expression patterns of the Drosophila non-classical cadherins in the larval brain. We expect that the results of these proposed aims will apply to neural development widely (in particular to vertebrates) because the high degree of conservation between morphogenetic processes shaping animal brains.